Apparently people do want to live in Passaic, New Jersey.
The Chetrit Group sold a 158-unit multifamily property in the Jersey suburb after facing a lawsuit from its lender who alleged the family firm defaulted on its loan.
The former site of St. Mary’s hospital, known as The Pennington, was bought by The Birch Group for $43.5 million, according to sources familiar with the deal.
Henry Bodek of Galaxy Capital brokered the sale.
Birch Group secured a $35 million loan from BridgeInvest to acquire the property.
ConnectOne Bank sued the Chetrits late last year, alleging their firm failed to make payments on a $23.4 million construction loan. That loan was used to convert the former hospital into a six-story rental building.
The bank alleged the Chetrits missed their loan payment in November and failed to pay off the loan’s balance by December. The bank also alleged the Chetrits had construction liens on the property. The lender sought to appoint a receiver for the property.
But the Chetrits had another motive for not paying off their mortgage. They were already under contract to sell the property to the Birch Group for a price far greater than their outstanding loan.
The Chetrits acquired the property at 199-231 Pennington Avenue in 2012 for $6.5 million, according to New Jersey property records. The group then converted the hospital site into a
new multifamily building. Amenities at the building include two gyms, intended for men and women separately.
Passaic’s population shot up 29 percent from 1980 to 2000, and even though its growth slowed in the next two decades, it was still the fastest growing city in New Jersey in that time. The suburb lost residents amid the pandemic, and now has about 70,000 people.
The Chetrit Group is among the largest landlords in the metro area. Last year it ranked as The Real Deal’s largest residential developer in New York City with 2,156 units under construction.
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